Modern Me..AP

8/3/2019 Modern Me..AP

http://slidepdf.com/reader/full/modern-meap 1/22

Presented by :- Bhopal Singh

&

Manju Singh



j g

Modern Methods of P A

Management By Objectives

360 Degree Appraisal

Assessment Center Human Asset Accounting Method

Behaviouraly Anchored Rating Method

Balanced Scorecard Approach



MANAGEMENT BY OBJECTIVES

The concept of ‘Management by Objectives’ (MBO) wasfirst given by Peter Drucker in 1954. It can be defined as aprocess whereby the employees and the superiors cometogether to identify common goals, the employees set theirgoals to be achieved, the standards to be taken as thecriteria for measurement of their performance and

contribution and deciding the course of action to befollowed.The essence of MBO is participative goal setting, choosingcourse of actions and decision making. An important part

of the MBO is the measurement and the comparison of theemployee’s actual performance with the standards set.Ideally, when employees themselves have been involved

with the goal setting and the choosing the course of actionto be followed by them, they are more likely to fulfill theirresponsibilities.



Management By Objectives (MBO)

What – How approach?

Substitutes good intentions with a process whereeverything is put in black & white

Process

Define Role

Define KRAs

Indicators of Effectiveness Set SMART objectives

Monitor

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UNIQUE FEATURES AND ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) isto create empowered employees who have clarity of the

roles and responsibilities expected from them, understandtheir objectives to be achieved and thus help in theachievement of organizational as well as personal goals.

Some of the important features and advantages of MBO

are:

Clarity of goals – With MBO, came the concept of SMARTgoals i.e. goals that are:

SpecificMeasurable

Achievable

Realistic, andTime bound.



Cont..

The focus is on future rather than on past. Goals

and standards are set for the performance for thefuture with periodic reviews and feedback.

Motivation – Involving employees in the wholeprocess of goal setting and increasing employeeempowerment increases employee job satisfactionand commitment.

Better communication and Coordination –

Frequent reviews and interactions betweensuperiors and subordinates helps to maintainharmonious relationships within the enterpriseand also solve many problems faced during the

period.



Cont..

It is result –oriented. It assists the planningand control functions and provides

motivation. Employees know exactly what is expected of

them and how they will be evaluated.

Employees have a greater commitment toobjectives that they have participated indeveloping than to those unilaterally set by their bosses.



PROBLEMS AND LIMITATIONS OF MBO 1. Time and cost.

2. Failure to teach MBO philosophy.

3. Problems in objective setting.

4. Emphasis on short-term objectives.

5. Inflexibility.

6. Frustration.

8



360-Degree Feedback: It is a technique which issystematic collection of performance data on an individual

group, derived from a number of stakeholders likeimmediate supervisors, team members, customers, peersand self. In fact anyone who has useful information on howan employee does a job may be one of the appraisers. This

technique is highly useful in terms of broader perspective,greater self-development and multi-source feedback isuseful. 360-degree appraisals are useful to measure inter-personal skills, customer satisfaction and team building

skills. However on the negative side, receiving feedbackfrom multiple sources can be intimidating, threatening etc.Multiple raters may be less adept at providing balanced andobjective feedback.



360 Degree Appraisal Merits : Provides a well-rounded view

Avoid individual bias

Can establish consensus Demerits :

Response from colleagues and external

customers may be biased or simply result of trade-offs(give and take).

It ignores performance in terms of achieving goals.



. Assessment Centers: This technique was firstdeveloped in USA and UK in 1943. An assessment

center is a central location where managers may come together to have their participation in jobrelated exercises evaluated by trained observers.

It is more focused on observation of behaviorsacross a series of select exercises or work samples. Assessees are requested to participate in in-

basket exercises, work groups, computersimulations, role playing and other similaractivities which require same attributes forsuccessful performance in actual job.



Disadvantages –

Costs of employeestraveling and lodging, psychologists,ratings strongly influenced by

assessee’s inter-personal skills. Solidperformers may feel suffocated insimulated situations. Those who are

not selected for this also may getaffected.



HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every

organization. Human resource accounting methodtries to find the relative worth of these assets in theterms of money. In this method the Performanceappraisal of the employees is judged in terms of cost

and contribution of the employees. The cost of employees include all the expenses incurred on themlike their compensation, recruitment and selectioncosts, induction and training costs etc whereas theircontribution includes the total value added (in

monetary terms). The difference between the cost andthe contribution will be the performance of theemployees. Ideally, the contribution of the employeesshould be greater than the cost incurred on them.

http://appraisals.naukrihub.com/






Human Resource Accounting

Method

Merits :-

Measurement of human assets in

terms of money and ROI.

Demerits :

It ignores quality aspect of performance.



BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a

relatively new technique which combines the graphicrating scale and critical incidents method. It consistsof predetermined critical areas of job performance orsets of behavioral statements describing important

job performance qualities as good or bad (for eg. thequalities like inter-personal relationships,adaptability and reliability, job knowledge etc). Thesestatements are developed from critical incidents.

In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording andcomparing the behaviour with BARS. Developing andpracticing BARS requires expert knowledge.



Performance Points Behavior

Extremely

good

7 Can expect trainee to make valuable suggestions

for increased sales and to have positiverelationships with customers all over the

country.

Good 6 Can expect to initiate creative ideas for improved

sales.

Above average 5 Can expect to keep in touch with the customers

throughout the year.

Average 4 Can manage, with difficulty, to deliver the goods

in time.

Below average 3 Can expect to unload the trucks when asked by the supervisor.

Poor 2 Can expect to inform only a part of the

customers.

Extremely poor 1 Can expect to take extended coffee breaks &

roam around purposelessly.

Behavioral Anchored Rating Scales



BARS Merits :-

Technique is valid and reliable as it

identifies observable and behaviors of specific jobs.

Demerits :-

Identified critical behaviours are activity directed rather than result directed.

Construction of BARS is expensive and time

consuming.



The Balanced Scorecard

To evaluate the organisational and employee performancein Performance appraisal management processes, the

conventional approach measures the performance only ona few parameters like the action processes, results achievedor the financial measures etc. The Balanced scorecard –anapproach given by Kaplan and Norton- provides a

framework of various measures to ensure the complete andbalanced view of the performance of the employees.Balanced scorecard focuses on the measures that driveperformance.

The balanced scorecard provides a list of measures thatbalance the organizations internal and process measures with results, achievements and financial measures.





Balanced Scorecard The financial measures – The financial measures include the results like

profits, increase in the market share, return on investments and other

economic measures as a result of the actions taken.

The customers’ measures - These measures help to get on customersatisfaction, the customer’s perspective about the organisation, customerloyalty, acquiring new customers. The data can be collected from thefrequency and number of customer complaints, the time taken to deliver the

products and services, improvement in quality etc. The internal business measures – These are the measures related to the

organization’s internal processes which help to achieve the customersatisfaction. It includes the infrastructure, the long term and short termgoals and objectives, organizational processes and procedures, systems and

the human resources. The innovation and learning perspective - The innovation and learning

measures cover the organization’s ability to learn, innovate and improve.They can be judged by employee skills matrix, key competencies, valueadded and the revenue per employee.



BENEFITS OF BALANCED SCORECARD

The benefits of the balanced scorecard approach in

measuring performance are: Gives the complete picture of the employee as well as the

organisational performance.

It guides users in determining the critical success factors

and performance indicators. Strategic review or analysis of the organisational

capabilities and performance.

Focusing the whole organisation on the few key things

needed to create breakthrough performance. Integrating and directing the performance and efforts from

the lowest levels in the organisation to achieve excellentoverall performance.



By: BHOPAL

Modern Me..AP

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